It’s a marketing strategy that has been used by big businesses for over a century: give consumers something for free in the hope of reaping some benefit further down the line. Coca-Cola - who haven’t done badly with their marketing efforts - introduced the first coupon for a free glass of Coke in 1887. Their deal got people into pharmacies, who made sure to stay stocked up, and soon the drink was a household name across the US.

These days, of course, the global marketplace is more competitive so is giving away ‘freebies’ still a valid marketing strategy? The general consensus is that there remains a time and place for product giveaways, if done properly. So when is it a good idea? We look at how small businesses can give free products away in a manner that benefits them.

When you want to create a ‘buzz’

This encapsulates a number of aspects, but it’s important to know exactly what you’re hoping to get out of your free product promotion. If you want to get people talking about your business, make sure they’re doing so on the platforms you want—give them your social media handles, or a way to recommend friends.

For businesses just starting out, offering your normal service for free is a way to iron out the kinks in your offering - people will be far more forgiving if they haven’t paid - and it can also help you create relationships with influential ‘ambassadors’ who may bring more people to you - think about local bloggers or social media influencers who already talk about products or services like yours. If this is your approach, consider how you can target those with larger followings to maximise the effect.

To make people feel special (and get in their heads)

Randomly rewarding existing customers with free products allows you to boost your image and remind your customers of your existence. A small freebie may entice them to visit you and spend more, so try to offer something they have to redeem in a manner that will promote further spending.

Recent data showed sales of a product, in this case a soft drink, increased by 38% even when similar products, like a smaller size, were being given away in store. Similar principles are behind ‘freemium’ models for services - free demos and plans - to get people in the door and invested in using the products, before they are then up-sold on the extra features available and decide to upgrade.

To increase your products’ perceived value

Slap a low price on something, and people will naturally assume it’s low quality—you get what you pay for, after all. But something curious happens with freebies given away in the right setting. Without a firm idea of what the product is worth, people will look for a cue as to its value. If it’s associated with a high-quality product - perhaps you’ve given them a free food sample as part of a luxury hamper - they will ‘anchor’ your product’s value at a much higher level.

Only with things they’ll want

Forcing freebies on people can have a damaging effect on your business’s image. Just as no one likes pop-ups offering free, and irrelevant, offers within five seconds of arriving on a new website, being given something without expressing any desire for it can backfire. Apple, usually masterful marketers, found this out in 2014 when they added U2’s latest album, for free, to 500 million iTunes accounts. The result? Backlash, complaints, and the eventual necessary creation of a tool to remove the album from people’s accounts. Be sure you are giving away what people want to receive.

In summary, give away freebies strategically

The most effective way to use free products to market your small business is to do your research and have a plan. This means knowing what you want to achieve, who you’re targeting, and how you’ll make it easy for consumers to take the next intended action on the road to strengthening your sales.

About the author

Jake Waller is a wordsmith who plies his trade here at Findmyshift. He uses his background in engineering to simplify complex topics for a variety of tech firms. When not writing for Findmyshift he blogs under a pseudonym at My Name is Skylance and has a passion for creative writing and editing, about which he's always talking on Twitter.